The Pronk Pops Show 1366, December 2, 2019, Story 1: The Day of Reckoning Is Approaching And Not A Word Is Spoken — Videos — Story 2: Democrats Trying To Talk and Tank The Economy Into a Recession — Big Failure — Economy Still Growing — Videos — Story 3: Federal Reserve Intervenes and Adds More Liquidity or Money Into Economy — Overnight and 42-Day Term Repos Madness Bubble — Return of Quantitative Easing? –Videos — Story 4: Department of Justice Inspector General Michael Horowitz Report Will Be Released on December 9 and Horowitz Will Testify Before Senate Judiciary Committee December 11, 2019 — Videos — Story 5: Lisa Page Role in Foreign Intelligence Surveillance Act (FISA) Court Warrant Application Process? — Videos

How the Fed creates free money for big banks, CEOs and billionaires

Trillion-dollar deficits as far as the eye can see, and hardly a voice of caution to be heard

THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL

In the old days, a decade or so ago, Democrats would have assailed Donald Trump‘s failure on federal deficits; instead of eliminating it, as promised, the deficit has doubled to a trillion dollars as far as the eye can see.

Republicans would be in full fury over the spending schemes of Democratic presidential candidates; even the mainstream moderates propose huge increases for health care, education and the social safety net for the disadvantaged.

Yet deficits, as a political issue, are dead.

The political impact always was exaggerated, but out-of-control deficits were a staple of opposition rhetoric. There invariably was some budget-balancing blue-ribbon group, the most famous being the Simpson-Bowles Commission.

For Democrats, the pressing urgency of unmet needs in health care, education, infrastructure and the social safety net far outweigh any rising debt. They favor tax hikes, mainly on the rich, to reverse the huge 2017 Republican tax cuts, but there’s less premium on the green eyeshade test of paying for all spending initiatives.

Most Republicans strongly want to keep those tax cuts — the only significant achievement of three years of party rule — and have little interest in tackling politically popular entitlements. In the years the Republican Party controlled both houses of Congress and the White House, it focused only on gutting the Affordable Care Act.

This has become the Trump Party, which overshadows the old Republican battle lines between budget balancers and tax cutters. This Republican executive is a tax cutter and budget buster.

As well as the politics, Democrats have a strong policy basis for their position. Early this year, the two most prominent Democratic economists — former Treasury Secretary Larry Summers and Jason Furman, chairman of the Council of Economic Advisers, both under Barack Obama — wrote an influential article citing structural declines in interest rates. This means that “policymakers should reconsider the traditional fiscal approach that has often wrong-headedly limited worthwhile investments in such areas as education, health care and infrastructure,” they said.

“Politicians and policymakers should focus on urgent social programs, not deficits,” they advised.

They don’t go as far as the Modern Monetary Theorists who basically argue the sky is the limit on debt unless inflation takes off. Instead, Summers and Furman claim a key is that the federal debt — as a percentage of the economy — stays at a relatively stable 3 percent to 4 percent, where it has been for the past five years.

The Republican deficits hawks, most recently former House Speaker Paul Ryan, have been rendered obsolete, as least as long it’s the party of Trump.

Even back in the 1970s, however, some Republicans embraced what supply-side propagandist Jude Wanniski called the “Two-Santa Theory” — namely, to counter Democrats’ support for popular spending programs, Republicans should favor huge tax cuts without concern for the deficit. (Ronald Reagan once joked he didn’t worry about the deficit, as it was “big enough to take care of itself.”)

Moreover, the Republican cries about the evils of big deficits have been more rhetorical than real, although the general perception of Democrats as more fiscally profligate is a canard.

The deficit also soared under George W. Bush, especially at the end of his term, with the economic crisis.

Obama inherited a massive $1.4 trillion shortfall and in eight years cut it by 60 percent.

The shortfall has doubled under Trump.

As a percentage of the economy, however, it has risen from 3 percent in the final Obama year to a bit more than 4 percent now.

Even Washington’s most stalwart and consistent fiscal hawk, Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, acknowledges the budget deficit isn’t a top policy concern right now “as low interest rates buy us some time.”

However, she cautions that the fiscal situation “is the worst it has been since just after World War II,” adding, “No one knows when the tipping point is or what it looks like, but those are questions we shouldn’t want to find the answers to.”

Albert R. Hunt is the former executive editor of Bloomberg News. He previously served as reporter, bureau chief and Washington editor for the Wall Street Journal. For almost a quarter-century he wrote a column on politics for The Wall Street Journal, then the International New York Times and Bloomberg View. Follow him on Twitter @alhuntdc.

The Central Banks’ Monetary Policy Is Backfiring (w/ Simon White)

New York Fed Adds Liquidity Amid Heavy Demand for Year-End Funding

The Federal Reserve Bank of New York intervened in financial markets again Monday. PHOTO: EDUARDO MUNOZ/REUTERS

By

Michael S. Derby

Updated Dec. 2, 2019 12:42 pm ET

The Federal Reserve Bank of New York again saw very strong demand for liquidity aimed at helping financial markets navigate the turn of the year.

The demand once again arrived as the Fed added temporary liquidity to financial markets Monday. All together the central bank pumped in $97.9 billion in two parts. One was via overnight repurchase agreements, or repos, that totaled $72.9 billion. The other was via 42-day repos.

While the Fed took all the securities that dealers offered it for the overnight repo, the longer-term operation saw eligible banks offer $42.55 billion in securities versus the $25 billion the Fed took. That level of interest was a replay from the last 42-day repo operation held Nov. 25, when eligible banks submitted $49.05 billion in securities against the $25 billion the central bank accepted.

The robust demand for year-end liquidity could alter the path of future longer-term Fed interventions and induce the central bank to increase their size. Central banks want to ensure that markets remain well behaved over year end, and they have signaled they will be flexible in achieving that. The Fed has already increased the size of other temporary operations, making it possible future term operations could be bigger as well.

The Repo Market, Explained

The repo market shook the financial world in September when an unexpected rate spike choked short-term lending, spurring the Federal Reserve to intervene. WSJ explains how this critical, but murky part of the financial system works, and why some banks say the crunch could have been prevented. Illustration: Jacob Reynolds for The Wall Street Journal

Fed repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a short-term loan of central-bank cash, collateralized by the securities.

The Fed’s interventions are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates remain well-behaved, with the central bank’s federal-funds rate staying within the 1.5%-to-1.75% target range. The effective fed-funds rate stood at 1.56% on Friday. The broad general collateral rate for repo trading stood at 1.62%, also for Tuesday.

The Fed has been intervening in markets in the current fashion since mid-September, when short-term rates unexpectedly shot up on a confluence of factors, although it has used similar operations for decades to manage short-term rates.

Since the large interventions started, money-market rates have been well-behaved. The Fed is using temporary operations to tamp down any possible volatility, while purchasing Treasury bills to build up reserves in the banking system. It hopes that by buying Treasury bills it will be able to cut back on repo interventions at the start of next year.

The Fed currently expects to buy Treasury bills through the middle of next year.

TRUMP PROBE REPORT AND HEARING – DECEMBER 9/11, 2019

DiGenova: Comey, Clapper and Brennan will have to pay the ‘Barr bill’

PROGRAMMING ALERT: Watch Jason Chaffetz discuss this op-ed and much more on “Mornings with Maria” on Monday, December 2.

Following a series of four damning inspector general reports over the last two years, there is little doubt the senior leadership of the Obama-era FBI was weaponized in the service of the Democratic Party. But as America awaits what many expect to be the most damning investigation of all, it’s fair to ask what has been done to rein in our rogue FBI.

The report on FISA abuse set for release on Dec. 9 is expected to show how the FBI used the Foreign Intelligence Surveillance Act (FISA) to spy on American citizens affiliated with the Trump campaign in 2016. As damning as such a conclusion would be, it will only be the latest in a series of explosive revelations from the Department of Justice Inspector General (IG) Michael Horowitz, some of which got muted coverage from the mainstream press. Advance leaks suggest the upcoming report will, at a minimum, show an FBI lawyer illegally altered documents to justify a FISA application.

Even before next week’s anticipated release, we already have IG reports implicating the FBI director, assistant director, deputy assistant director, and chief of the counterintelligence section. Though none of them remain at the bureau, we have seen little reassurance from current FBI Director Christopher Wray that the culture they created has changed.

Thus far, no one has been prosecuted, despite a long string of damaging reports and referrals. An IG can make a recommendation but it is up to the DOJ to prosecute, even if it is one of their own.

A 63-page report released last month found “numerous issues” with the FBI’s use of confidential sources during a period that included the 2016 election. That report revealed that the FBI lacked appropriate procedures to vet and maintain oversight of sources like the ones used against the Trump campaign. This created a security risk for the United States. Yet no prosecutions have been announced.

Last August, an even more serious finding was released when the IG determined that the FBI director himself had violated FBI policy and the terms of his own employment agreement in disseminating classified information for release to the media. Though the DOJ could have prosecuted based on the report’s findings, it declined to do so.

A May 2019 IG report implicated the FBI deputy assistant director for unauthorized contacts with the media, illegally disclosing sealed court documents and other sensitive information to the media, and accepting gifts from the media. The DOJ declined to prosecute. But why? The IG recommended prosecution.

The IG’s June 2018 probe into the Hillary Clinton email investigation implicated the FBI’s head of counterintelligence, Peter Strzok, of repeatedly articulating a strong political bias even as he headed up the investigation of Clinton’s exposure of classified information. The 500-page report, which reviewed 1.2 million documents and included interviews with more than 100 witnesses, documented numerous questionable decisions that benefited Clinton or damaged Trump, though the IG acknowledged the parties denied their political bias impacted their decisions.

The FBI is in shambles and there has been little to no public acknowledgment of the crisis by the current director. No work by him to stem this tide of political bias is evident to the public.

The report also highlighted an interoffice affair between Strzok and FBI lawyer Lisa Page, both of whom worked on the Clinton and Trump investigations. Next week’s IG report is also expected to document an affair between two other FBI lawyers who worked together on the FISA applications.

What is going on at the FBI and why no consequences for such blatant violations of internal policy and the law? And why did these vulnerabilities exist for so long without detection? No doubt adversarial intelligence agencies could have figured this out quite easily, making our intelligence operations vulnerable to exploitation.

Finally, an April 2018 report implicated FBI Assistant Director Andrew McCabe of inappropriately authorizing the disclosure of sensitive information to a reporter and repeatedly lying to investigators about it. The report found McCabe lied four times, three under oath, and that it was done “in a manner designed to advance his personal interests at the expense of Department leadership.” Though McCabe was fired, he wasn’t prosecuted.

What message does it send when the Justice Department protects its own?

The FBI is in shambles and there has been little to no public acknowledgment of the crisis by Director Wray. No work by him to stem this tide of political bias is evident to the public.

With the release of next week’s FISA report, we must demand action by Wray. Given the well-documented wrongdoing by the previous FBI director, deputy director, deputy assistant director, the chief of counterintelligence, and evidently DOJ counsel, the American people are right to question the legitimacy of America’s federal law enforcement apparatus.

If the American people are going to regain confidence in the senior leadership of the FBI, the Justice Department will need to prosecute wrongdoing as they would if it weren’t one of their own. Until then, questions of imbalance, favoritism and bias in one direction will persist. Certainly, we deserve better.

Lisa Page Breaks Silence On Trump’s DISGUSTING Behavior

Trump viciously mocks Strzok, Page at Minneapolis rally

Rep. Biggs: Lisa Page once engaged in FBI cabal, now playing the victim

Whitaker: Lisa Page made calculated move to front run IG report

Lisa Page Speaks: ‘There’s No Fathomable Way I Have Committed Any Crime at All’

STRIKING BACK

The former FBI lawyer and ongoing Trump target breaks two years of silence in this exclusive interview. And she has quite a lot to say.

Molly Jong-Fast

Updated Dec. 02, 2019 12:03PM ET / Published Dec. 01, 2019 7:59PM ET

It’s not often that you interview a subject who has no interest in being famous. But recently, I did just that when I sat down with Lisa Page the week before Thanksgiving in my hotel room in Washington, D.C. Page, of course, is the former FBI lawyer whose text-message exchanges with agent Peter Strzok that belittled Donald Trump and expressed fear at his possible victory became international news. They were hijacked by Trump to fuel his “deep state” conspiracy.

For the nearly two years since her name first made the papers, she’s been publicly silent (she did have a closed-door interview with House members in July 2018). I asked her why she was willing to talk now. “Honestly, his demeaning fake orgasm was really the straw that broke the camel’s back,” she says. The president called out her name as he acted out an orgasm in front of thousands of people at a Minneapolis rally on Oct. 11.

That was the moment Page decided she had to speak up. “I had stayed quiet for years hoping it would fade away, but instead it got worse,” she says. “It had been so hard not to defend myself, to let people who hate me control the narrative. I decided to take my power back.”

She is also about to be back in the news cycle in a big way. On Dec. 9, the Justice Department inspector general report into Trump’s charges that the FBI spied on his 2016 campaign will come out. Leaked press accounts indicate the report will exonerate Page of the allegation that she acted unprofessionally or showed bias against Trump.

How does it feel after all this time to finally have the IG apparently affirm what she’s been saying all along? She said she wouldn’t discuss the findings until they were officially public, but she did note: “While it would be nice to have the IG confirm publicly that my personal opinions had absolutely no bearing on the course of the Russia investigations, I don’t kid myself that the fact will matter very much for a lot of people. The president has a very loud megaphone.”

Page, 39, is thin and athletic. She speaks in an exceedingly confident, clear, and lawyerly way. But having been through the MAGA meat grinder has clearly worn her down, not unlike the other women I’ve met who’ve been subjected to the president’s abuse. She is just slightly crumbly around the edges the way the president’s other victims are.

My heart drops to my stomach when I realize he has tweeted about me again.

“It’s almost impossible to describe” what it’s like, she told me. “It’s like being punched in the gut. My heart drops to my stomach when I realize he has tweeted about me again. The president of the United States is calling me names to the entire world. He’s demeaning me and my career. It’s sickening.”

“But it’s also very intimidating because he’s still the president of the United States. And when the president accuses you of treason by name, despite the fact that I know there’s no fathomable way that I have committed any crime at all, let alone treason, he’s still somebody in a position to actually do something about that. To try to further destroy my life. It never goes away or stops, even when he’s not publicly attacking me.”

“I wish it didn’t,” she said. “I’m someone who’s always in my head anyway—so now otherwise normal interactions take on a different meaning. Like, when somebody makes eye contact with me on the Metro, I kind of wince, wondering if it’s because they recognize me, or are they just scanning the train like people do? It’s immediately a question of friend or foe? Or if I’m walking down the street or shopping and there’s somebody wearing Trump gear or a MAGA hat, I’ll walk the other way or try to put some distance between us because I’m not looking for conflict. Really, what I wanted most in this world is my life back.”

Rising Through the Ranks

Lisa Page did not aspire to fame or fortune. She was, she says, “one of those nerdy kids who from very early on knew I wanted work for the government and make the world a better place.” Born in the San Fernando Valley, she and her family moved to Ohio in her teens. She went to American University in Washington, D.C., and then moved back home to central Ohio to attend law school, living with her parents so she could save money.

After graduating from law school, she was one of an elite group selected for admission in the Department of Justice Honors Program in 2006—and the only woman in her class of five entering the Criminal Division. She worked as a federal prosecutor for six years before moving across the street to the FBI’s office of general counsel. Soon after her arrival, the deputy general counsel over national-security law hired her for a new special-counsel-type position in 2013.

Once there, her path begins to be set.

“I start [in the role] in early 2013, and there are two big events that kind of set the trajectory for the rest of my career at the FBI: the Boston bombing in April 2013, and Edward Snowden’s leaks in June of the same year,” she told me. “And those are both significant in their own ways, because the Boston bombing introduces me to Andy McCabe, who at the time was the head of the counterterrorism division at the FBI. Two months later, the Snowden leaks hit, which became a transformative moment for the intelligence community, setting off a series of reforms by the Obama administration with respect to the legal authorities that we rely on to collect intelligence.”

Eventually, she was asked to lead that effort, “which gives me a lot of exposure to senior FBI executives, as well as leaders through the IC, DOJ, and White House.”

Page continued to rise through the ranks of the FBI and was assigned to more significant and substantive work. She became close with McCabe. Eventually she became McCabe’s special counsel.